There are many instances in daily life where a person requires the ability to transfer readily redeemable value to another party. Until recently, the most easily transferrable value has been by the exchange of cash money, whether it had been commodity money, representative money redeemable for the deposited commodity, or just fiat money that is issued by a government's decree of legal tender. The system of exchanging coinage or bank notes for goods or services or for the making of loans or gifts, was far superior to the direct exchange of goods or services in a barter arrangement, Cash, as well as negotiable instruments in the form of checks, had provided the ability for individuals to travel spontaneously and over long distances using every available means of transportation, while still possessing the ability bring along their purchasing power.
The invention by IBM of automated teller machines to provide ready access to the user's cash through use of an ATM card and a personal identification number, provided even greater flexibility, because the person did not need to keep the cash on his/her person. However, the transferability of any monetary value is thereby limited to the person's ability to access an ATM machine to withdraw cash, and to then physically transport the cash to the desired party. The money transfer service provided by Western Union as of 1871, which is available still today, pe pitted a party to transfer cash to a recipient over long distances, but the recipient needed to pick up the cash at the location of the company's nearest agent. Pre-paid gift cards (as opposed to credit cards) from companies such as Visa and MasterCard provide some additional capabilities, because the gift card number may be communicated verbally or via email to a recipient, who may thereafter use the amount on the gift card. But these cards are somewhat limited in flexibility. Although they may be purchased online rather than in person, they are limited in usage to making a purchase, and furthermore, there is little or no inherent security because the card number is not encrypted and may therefore be used by anyone.
While some traditional forms of making a payment have been adapted to address the issues surrounding the need for a more fungible medium of exchange, they still do not provide the requisite amount/degree of access, flexibility, or transferability in a world that is increasingly dependent upon the electronic medium to instantly conduct commerce or to just interact. For example, the system known as PayPal™ is constructed to allow payments and money transfers through the internet, and in many respects represents a substantial improvement over a Western Union money transfer. PayPal can be used to send money via the internet directly to the recipient, but it requires the recipient to sign-up with PayPal. Thereafter, the recipient may spend the amount online, or transfer it to his/her bank, or may request a check, or he/she may use the amount through a PayPal debit card. But fungibility is funneled through PayPal, and is thereby limited, and it is certainly not anonymous.
Inventions found within several recent U.S. Patents have sought to address some of the above-mentioned restraints and drawbacks. For example, U.S. Pat. No. 6,239,981 to Hill for a “Transaction system” discloses a “carnet or a set of digital payment tokens which comprises a set of random numbers in a determined sequence.” These digital payment tokens represent an improvement over the previously mentioned prepaid gift cards in that the digital payment tokens may be secured by encoding a “user-specific key” into the random numeric sequence. However, these tokens nonetheless have some of the other drawbacks, being, for example, that they typically require that “all three of the user, the merchant and the payment server will be linked by internet connections.” A similar system is offered by U.S. Pat. No. 7,814,009 to Frenkel for “Anonymous On-line Cash Management System,” which may “convert funds into anonymous currency having a serial number associated therewith.” However, the Frenkel system requires that the money transferred by the customer be “converted into an electronic or on-line form of currency and placed into a numbered account.” Requiring a numbered account contravenes the aforementioned anonymity and flexibility that needs to be afforded the user.
The system and method of the current invention addresses these problems in providing an anonymous, flexible, and highly fungible medium of exchange.